Ranger Posted January 19, 2012 Report Share Posted January 19, 2012 Client’s father left farmland in a trust. Client and two siblings are trustee’s. Trust transferred land to client that was valued at $300,000 on date of death. Client also assumed a mortgage of $100,000 on the property. I believe the basis in the property to the client is $300,000. Can anyone prove me right or wrong? Thanks. Quote Link to comment Share on other sites More sharing options...
jasdlm Posted January 20, 2012 Report Share Posted January 20, 2012 Was the Trust a Grantor Trust at the time of Client's Father's death? Quote Link to comment Share on other sites More sharing options...
Ranger Posted January 25, 2012 Author Report Share Posted January 25, 2012 It was a grantor, living, revocable trust up to the time of his death. After his death, the trustee’s were authorized to handle the assets as they saw fit. A portion of the property was transferred to the oldest son. Under normal circumstances, basis would be FMV on DOD, $300,000. The twist here is that the son also assumed the mortgage on the property, $100,000. A closing statement was drawn up for that amount. I believe the basis should be $300,000. If the transfer had been made from a living person, it would have been considered part sale and part gift. I am not aware of any special rules that apply to a trust. Quote Link to comment Share on other sites More sharing options...
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